Correlation Between Cedar Realty and Anheuser Busch
Can any of the company-specific risk be diversified away by investing in both Cedar Realty and Anheuser Busch at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Cedar Realty and Anheuser Busch into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cedar Realty Trust and Anheuser Busch Inbev, you can compare the effects of market volatilities on Cedar Realty and Anheuser Busch and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Cedar Realty with a short position of Anheuser Busch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cedar Realty and Anheuser Busch.
Diversification Opportunities for Cedar Realty and Anheuser Busch
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cedar and Anheuser is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Cedar Realty Trust and Anheuser Busch Inbev in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anheuser Busch Inbev and Cedar Realty is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Cedar Realty Trust are associated (or correlated) with Anheuser Busch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anheuser Busch Inbev has no effect on the direction of Cedar Realty i.e., Cedar Realty and Anheuser Busch go up and down completely randomly.
Pair Corralation between Cedar Realty and Anheuser Busch
Assuming the 90 days trading horizon Cedar Realty Trust is expected to generate 1.45 times more return on investment than Anheuser Busch. However, Cedar Realty is 1.45 times more volatile than Anheuser Busch Inbev. It trades about 0.16 of its potential returns per unit of risk. Anheuser Busch Inbev is currently generating about -0.48 per unit of risk. If you would invest 1,512 in Cedar Realty Trust on August 28, 2024 and sell it today you would earn a total of 108.00 from holding Cedar Realty Trust or generate 7.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cedar Realty Trust vs. Anheuser Busch Inbev
Performance |
| Timeline |
| Cedar Realty Trust |
| Anheuser Busch Inbev |
Cedar Realty and Anheuser Busch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cedar Realty and Anheuser Busch
The main advantage of trading using opposite Cedar Realty and Anheuser Busch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cedar Realty position performs unexpectedly, Anheuser Busch can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Anheuser Busch will offset losses from the drop in Anheuser Busch's long position.| Cedar Realty vs. Saul Centers | Cedar Realty vs. Wheeler Real Estate | Cedar Realty vs. Macerich Company | Cedar Realty vs. Simon Property Group |
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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